Privatization, other non-tax measures to make up for revenue shortfall
The Joint Standing Committee on Finance and Revenue, and International Monetary Fund reached a consensus on not introducing a mini budget this fiscal year. This means there will be no news taxes for now.
The government will instead look to plug the revenue shortfall through non-tax measures, including privatisation. The government will expedite the process of selling its stakes in government-owned enterprises and reassured the visitors that it would collect an additional Rs400 billion in non-tax revenue targets.
The government had set a tax collection target of Rs5.5 trillion, which was later revised to Rs5.2 trillion. However, the government fell short and was not able to achieve even the revised target.
The Pakistani side also declined the IMF’s proposal to raise sales tax by one percentage point to 18%. It convinced the IMF that it would complete its tax targets without raising sales tax.
The IMF also asked Pakistan to spend more on human development and commit itself towards the Sustainable Developments Goals and cut non-development expenditure to control fiscal deficit.